GDP v QOL

“We are persuaded to spend money we don’t have, on things we don’t need, to create impressions that won’t last, on people we don’t care about.” Tim Jackson, An Economic Reality Check

We are indeed living in interesting times.  There is a growing population that is questioning the viability of the foundation of our society, the Gross Domestic Product.  There is a (minority) viewpoint that maybe, just maybe, more “stuff” doesn’t equal more happiness. 

Where did this start?  Interestingly enough, there is a connection between happiness and GDP going back to the late 1700’s, when an Englishman named Jeremy Bentham outlined a philosophy to assess the merits of actions based on how much happiness said action produced, using pain and pleasure as measurables.  Which, not surprisingly, turned out to be problematic, given individuals vastly different perspectives on what constitutes pain or pleasure.  So a new measure was born.  “Economists, the most enthusiastic adopters of the concept, came to focus instead on the tangible expression of people’s needs and desires: what they were willing to spend money on.”

Consumption is generally viewed to be the silver bullet for a healthy economy.  In a recession?  Pump stimulus money into the economy, so we can buy more stuff.  Great idea!  But I’ll make sure to buy local, so I’m not lining the pockets of those greedy bastards that got us into this mess in the first place. 

Stacey Mitchell, in a TEDxDirigo talk “We Can’t Shop Our Way to a Better Economy”, outlines some pretty terrifying realities.  We are predominantly beholden to a handful of conglomerates.  “Over 40% of the nation’s milk supply is now processed by a single company…if you’re a dairy farmer, that means it’s pretty hard to get a fair price for your milk.  If you’re a consumer you still have this illusion of choice because this one company markets under dozens of different brands.”  “One third of everything we buy online now comes from a single company.”  She argues that buying local alone won’t get us out of the recession.  Yes, small farms are twice as productive per acre with fewer negative environmental impacts.  Yes, big box stores pay criminally low wages and don’t improve the local economies.  “If they aren’t outperforming, if they aren’t delivering better outcomes, how is it that these giant companies have become so dominant?  The answer is that they’ve used their market power and their political influence to rig the game.  Since 1995 we’ve given over $275 billion to farms through the farm bill; almost 87% of those dollars went to 10% of the largest farms, and most of the money was spent on a handful of big commodity crops, like corn and soybeans.  These are the building blocks of processed foods.  No wonder that a quarter pounder usually costs less than a pound of locally grown broccoli.”

She outlines the importance of communities in changing our economic structures.  Research shows that we are seven times more likely to have a conversation at the farmer’s market than a big box store.  Communities with locally owned businesses have stronger social networks, which give them an edge in innovation.  A locally owned bank that makes a 30-year mortgage doesn’t sell the mortgage—it’s in their best interest for the homeowner not to default, because a foreclosure for the homeowner is just as devastating to the local bank. 

To me this is a critical component of where we need to go.  Rather than looking at “How do we stimulate more spending to improve the economy” we need to look at Quality of Life.  Are our citizens able to access all of the basic necessities of life, are we able to provide them?  Are we designing communities that encourage social connectivity, mental and physical health, financial stability, and inclusion?

So where do we go from here?  Many are embracing the idea of Gross Domestic Happiness.  A group of foundations are developing a Social Competitiveness Index, which will “measure and compare the capacity of countries—government, the private sector and civil society, working together—to innovate and to test and scale up solutions to the social and environmental problems that they face in the 21st century.”  Some are pushing for “beyond GDP metrics”, and asking credit rating agencies such as Moody’s to rate the creditworthiness of companies and national economies by societal well being and quality of life, our planet’s carrying capacity and ecological indicators.  And many are choosing to buy local, to consume less, to hang out on their front porch with the neighbors instead of going to the mall.  I’ll be on my porch. 

“Our Gross National Product - if we judge the United States of America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.  It counts special locks for our doors and the jails for the people who break them.  It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.  It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities… Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play.  It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.  It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.  And it can tell us everything about America except why we are proud that we are Americans.”  ~Robert F. Kennedy, 1968